Peach Tree Corp. has accumulated earnings and profits (E&P) of $1.750,000 and no current E&P for the current year. On December 31st Peach Tree Corp, distributes to Grape, its sole shareholder a parcel of land with a basis of $1,625,000 and a fair market value of $1,250,000. Grape's basis in the stock is $625.000 Grape plans on growing fruit trees on this land. What portion of the distribution to Grape will be treated as a dividend? Note: do not adjust earnings and profits for the tax effect of any kinds or losses due to the distribution $625.000 51.250.000 $375.000 $1.625.000